The Debate – The Accountancy Foundation – What’s in it for us?

What’s in it for us?

By Margaret May

While the rhetoric claims the Accountancy Foundation was set up to cover auditors and accountants across the spectrum, it appears to cover audit only.

This is not entirely surprising, as it is after all, auditors, who are appointed – through statute – with the purpose of protecting the public interest. The Accountancy Foundation has defined accountancy as ‘including auditing services’. In my opinion the industry includes two distinct areas – auditors and accountants.

Auditors being clearly defined by statute and accountants being those responsible for preparing the statutory accounts and reports, taxation and company secretarial. The former obviously need to be independently appointed and regulated, while the latter are not currently even obliged to be a member of one of the Consultative Committee of Accountancy Bodies.

Beyond this, employed by organisations are members of the management accountancy profession set up to provide the information essential to running a business not provided by the statutory accounts and reports.

Management accountants carry out financial and business management activities, which include treasury, internal audit, performance management, business analysis, costing and information management. Management accountants have no compulsion to become members of the CCAB. Even if, post-Enron, it’s thought necessary to independently regulate accountants involved in statutory work, it would first be necessary to protect the title ‘accountant’ and could not practically be extended beyond listed companies – could it?

Whatever the outcome of the Accountancy Foundation and the government reviews, there’s no way independent regulation could be extended to cover management accountancy.

So is it appropriate for management accountants from the CCAB to be joining the Accountancy Foundation and what benefit can they or the public accrue from such membership?

  • Margaret May is a member of CIMA council

Delivering across the boardBy Chris Wobschall

The Accountancy Foundation and its constituent bodies – the Review Board, the Auditing Practices Board, the Ethics Standards Board and the Investigation and Discipline Board – is the independent regulator of the accountancy profession in the UK and also covers the Institute of Chartered Accountants in Ireland.

Accountancy is a wide discipline and the Foundation regulates all the activities undertaken by accountants in their professional life.

As the Review Board’s recent Key Facts and Trends in the Accountancy Profession shows, only 21% of CCAB accountants are engaged in public practice, including audit.

The Review Board’s Public Interest report in February set out a comprehensive work programme, including the review of education, training and continuous professional development requirements for accountants. It has just completed a study of the complaints and disciplinary procedures of the accountancy bodies.

This addressed the systems in place for all complaints against accountants, whether this is to do with financial reporting, investment business, insolvency, tax, audit or other functions.

As a key player in the DTI/Treasury co-ordinating group on audit and accounting issues, it is also tackling current concerns over the monitoring of financial reporting.

The Foundation committee itself has done a sterling job in establishing the new regulatory regime, particularly in ensuring the strong lay representation of board members that gives it its independence and strength, and whose concerns clearly cover the whole spectrum of accountancy.

The Ethics Standards Board’s Setting the Agenda for Ethics, published in May, consulted on ethics for all accountants, whether they be in public practice, industry and commerce, the public, charitable or voluntary sectors of the economy.

The Investigation and Discipline Board will be concerned with cases of serious public interest involving accountants across the spectrum. The Foundation was established by agreement between the CCAB bodies and the government to maintain public confidence in the whole profession and that continues to be our aim.

  • Chris Wobschall is secretary to the Foundation and the Review Board.

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